Preheat the oven to 350°F and set a rack in the lower middle position. Remove the beef from the fridge about 30 minutes to 1 hour before cooking. Place it on a paper towel-lined cutting board and pat them dry with paper towels.
Sprinkle coarse salt and black pepper on all sides of the beef cubes. In a large Dutch oven, heat up 1 tablespoon of olive oil at a medium-high heat.
Sear the meat in up to 3 batches. Use tongs to turn the meat. Cook each batch for about 3 to 5 minutes.
Add one tablespoon of oil for each batch and avoid overcrowding the pan to prevent steaming. Transfer the browned meat to a large plate and set it aside.
In the same pot, add more olive oil and add mushroom. Saute mushroom for about 3-5 minutes. Set aside.
Add the onions, garlic, balsamic vinegar, and Worcestershire sauce. Cook for about 5 minutes.
Scrape up the browned bits from the bottom of the pan, then add the tomato paste and cook for another minute.
Bring back mushroom and the beef with its juices back to the pan. Add the wine, beef broth, water, bay leaf and thyme.
Stir with a wooden spoon to loosen any brown bits from the bottom of the pan. Allow it to reach boiling point. Cover the pot with a lid, move it to the oven that's already heated, and let it braise for a duration of 2 hours.
Remove the pot from the oven and add the carrots and potatoes. Cover the Dutch oven and put it back in the oven. Cook for about an hour. The vegetables should be soft, and the meat should be tender.
5 minutes before remove the pot from the oven, add 2 tablespoons of arrow flour in a small pot with a little water. Mix all well to combine.
Remove the pot from the oven. And add arrow flour mixture and mix well. Fish out the bay leaf and discard.
Adjust seasoning if necessary. Garnish with fresh parsley, if desired. Enjoy!